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Presentation02-Propertypowerandgovernment.pptxProperty, Power, and Government
Property, Power, and Government
Capitalism = private ownership of means of production
Public ownership also exists but represents a small proportion
Government’s primarily role is to provide legal and regulatory structure to private economic activity
Define and defend private property
Provide public goods
Commercial infrastructure
Social infrastructure
Property, Power, and Government
Private property
Not a thing, instead a legal relationship
The right to use owned property
The right to generate income from the use of owned property
The right to transfer, abandon, or destroy owned property
The right to exclude others from using owned property
Government defines and defends private property through its judiciary, police, and military institutions
Capitalist governments are forever attending to the defense of private property
Property, Power, and Government
The Liberal Ideal
John Locke’s theory of government
Government’s only justification is its defense of private property
The right to own property is viewed as a natural right
Required to survive
The individual’s right to property should not come at the expense of other’s right to property
Unreasonable accumulations of property violate the law of nature (the rule of reason)
Government adjudicates disputes over property
1st Version: Nightwatchman State, assumes such conflicts are minor
2nd Version: Social Democracy, government needs to regulate property to ensure everyone has an equal right to survive
Property, Power, and Government
Commodity Producing Societies
Private ownership of means of production
Widespread use of markets to exchange property
Simple commodity producing society
Every family owns enough means of production (farm, factory, business, etc.) to produce for itself and sell the remainder on open market
Exchanges are viewed as mutually beneficial
Thomas Jefferson’s vision of democracy in the USA
Capitalism differs from a simple commodity producing society in that many (most) do not own means of production
Property, Power, and Government
Varieties of Capitalism
LME (“small” government version)
Private ownership of means of production
Rely on market coordination
Commercial infrastructure well developed
Social infrastructure may also be well developed, but sometimes minimized (as in the USA)
CME (social democratic version)
Private ownership of means of production
Rely on market but greater coordination of firms with other stakeholders (in particular, labor)
Commercial infrastructure well developed
Social infrastructure more developed than in many LME societies
Property, Power, and Government
Capitalism and democracy
Not necessarily complementary
Capitalism emerged from a monarchical context
Numerous capitalist societies have been run by dictatorships or oligarchies
Yet democracy commonly viewed as coterminous with capitalism
Largely because of liberal political traditions – i.e., John Locke
Democracy of property owners
Productive property relevant, not necessarily consumptive property
Democracy of productive property owners versus widespread democracy
